A Controversial Relationship: Ofo Uses GSE Cryptocurrency For Fundraising?

The troubled bike sharing company, Ofo, allegedly used a cryptocurrency known as GSE (Global Sharing Economy) for a new round of fundraising in July this year, according to a person familiar with the matter.

The source said that an ofo representativecontactedGSENetwork. Through adigital asset investment platform called the Token Fund, the ofoofficial subscribed for a share of GSE tokens which isapproximately the equivalent of 600 ETH. Some Token Fund employees also participated in this financing project in their own names.

 The source also revealed that the name GSE was rarely mentioned by the two sides during their contact period, but was rather referred to as “the cryptocurrency of yellow bikes.” It is expected that the total fundraising amount of this round, carried out by GSE network, may be well above 10,000 ETH. 

While rumors of investments and acquisitions are appearing almost every week, ofo fails to give out tokens to investors as promised. This bike-sharing company issupposed to unlock 50 percent of its GSE tokens after half a year and then unlock 10 percent every following month. That said, however, the source cited in this articleis yet to receive any GSE tokens.

A senior official at the Token Fund claimed that this round of fundraising was completely a fraud. Running out of money, ofo used this corrupt scheme to swindle money from investors while withholding the issuance of GSE tokens.

The source also revealed that at the time of fundraising, the price of GSE was about 2 cents, and the trading volume was not small. The price of GSE is about 3 cents now, however, and the trading volume returns to almost zero. When people in the cryptocurrency and bike-sharing industries mentioned this ofo controversy, they said that “a lot of business magnates have participated in this round of financing. Having a natural proclivityfor the exploitation of individual investors, these top executives were abused by ofo this time.”

According to public resources, GSENetwork was established at the beginning of this year and registered in Singapore. The official announcement states that GSENetwork is committed to building a trust platform, with goals for transparency and security, on a decentralized blockchain network. The incentives are to unleash the potential of a sharing economy that is yet to be developed, increasing the interaction between players of all sizes through the integration of economic markets sharing on blockchain. 

The project has already been released in Singapore, South Korea and Japan. Moreover, ofo’s application in Singapore also includes a reward system where users can earn GSE token awards by riding an ofo yellow bike. This unique feature of ride and earn has also been replicated in Japan.

 So, what is the relationship between ofo and GSE?

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First, according to the officialwebsite of GSENetwork, ofo is in a strategic partnership with GSENetwork.

 The Kunpeng Theory, a news outlet led by citizen journalists, states in a report that it is deceiving and far-fetched to define the relationship between ofo and GSENetwork as cooperative. Wei Dai, the founder of ofo, has previously served as a project consultant for GSENetwork, as shown in the company’s white paper. For some unknown reasons, however, thenew version of GSENetwork’s white paper doesn’t include this fact.

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Moreover, we found from GSENetwork‘s official website that many staff members who used to work for ofo are now employed by GSENetwork.

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It is also worth mentioning that Wei Dai has already delved into the blockchain industry, as reported by the “Daily Economic News.”

 According to a person familiar with the matter, many city managers and team members from ofo have purchased tokens issued by GSENetwork. “It is not mandatory, but many people buy tokens because not making a purchase will embarrassthem. When the bosses buy, you’d better follow suit. I know some people who have boughtthousands of tokens because of that. Ofo denies the news report that the company is using cryptocurrency, however, itinternally encouragesemployees to buy tokens. What an inconsistency! Ofo is making a blatant lie. In fact, many people from ofo have already switchedto this blockchain company.”

Subsequently, ofo made a public statement that the blockchain industry has always been a focus of the company. The decentralization and immutability of blockchain make it an ideal technology for various industries. Ofo has alwayswant to lead the marriage of blockchain and sharing economy. Itis absurd to say that ofo ditches bikes for cryptocurrency.

Yet, the response from ofo did not mention the city managers and team members who reportedly purchased a large quantity of GSE tokens.

We have sent three questions to ofo’s public relations representative. What is the relationship between ofo and GSENetwork? Is it true that ofo’s city managers and team members bought GSE tokens? Is it true that ofo completed its new round of financing via the GSENetwork platform?

As of press time, no response hasyetbeen given by ofo. We will continue to pay close attention to this matter.

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